Essay Example on Revest Asset Management: Capitalizing on Distressed Real Estate Success

Where others see challenges, Revest Asset Management sees a chance to capitalize on success. It is an asset management company that specializes in distressed real estate and is based in Toronto, but its operational headquarters are based in Delray Beach, Florida. Revest Asset Management company's mission is to obtain distressed single-family homes in the US, renovate them, manage the houses, lease them out, and eventually sell them for a profit. Its diligence, precise analytics, and persistence have earned them the confidence of joint venture partners, developers, lenders, and, most importantly, investors. For our class assignment, "Interview with a strategist," I decided to interview the founder and CEO of Revest Asset Management, Howard Steinberg.

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Howard has a wealth of investment experience spanning 20 years in both Canada and the US. He is most recently a founder and partner of a Florida-based firm known as Palm Beach Financial Solutions, which specializes in purchasing distressed single-family homes. Before establishing PBFS, Howard was the President of a Toronto-based real estate developer and lender known as the Rose Corporation. Prior to that, he ran the Canadian office of Fortress Investment Group. He has also been a managing partner at RBC Capital Partners and has held senior finance positions at GE Capital. Howard is a CFA Charterholder and holds an MBA from the University of Western Ontario. He is currently situated in Delray Beach, Florida.

Our class discussions defined strategic planning as continuous activity companies undertake to form a vision, scrutinize their internal and external environments, and settle on one or more strategies that will, in turn, create value for all the stakeholders involved. What is your definition of strategic planning, and how do you measure is it is successful within your company? Mr. Steinberg's definition is that strategic planning is the basis upon which a company defines its goals and objectives and aligns them with the organization's vision. It is thus, the foundation of a company's critical decisions and the guiding factor for the whole organization. Mr. Steinberg measures its success by seeing if the plan is specific and reasonable.

Andrew Foley, in a Clear-Point Strategy article, outlines the measures of gauging the success of a strategic plan as first being quantifiable. This implies that measures have to be viewed on the basis of factual certainty and not in light of impulse or 'gut-feeling.' Secondly, measures have to be understandable. Someone should not necessarily take long to comprehend the company's performance and should roughly take 10 seconds to understand the suggestions or analysis. Also vital in this aspect is simple-to-understand outlines and diagrams that can be immediately devoured. Thirdly, are your measures actionable? It would be best if you picked estimates you can affect. It is also vital that your subordinates take pride in their work, a phenomenon that can be achieved once they feel that they can impact the measures. The fourth quality is if the measure is repeatable. You don't need the measure to be valuable just a single time. After some time, you ought to have the option to follow progress on the measure so you can dissect basic patterns. If you look at a unique measure every month, you won't have the option to graph it. The fifth and last quality is if the measure is timely. Strategic measures ought to be analyzed annually at the very least, and month to month at the most. Taking longer than that makes it hard to connect the measure to your strategic plan.

Our textbook defines stakeholders as persons or groups of people with a particular interest in the performance of a firm. They possess the ability to influence the firm's actions and can decide up to a certain degree on the support they will convey to the company's strategy. They include the customers and suppliers, the shareholders, as well as the employees and the community upon which the firm conducts its business. There are three groups of stakeholders, as outlined in figure 1.4 in chapter one of the textbook. They comprise of: owners, external stakeholders, and internal stakeholders. Companies should perform an analysis to scheme out an elaborate communication level with their stakeholders in relation to their level of interest and influence in a particular undertaking of the firm. This can be achieved by first identifying your stakeholders, prioritizing them, and lastly, understanding who your key stakeholders are.

My question to Mr. Steinberg is, out of the three groups, which group do you feel adds the most value to the company? All three groups, owners, internal and external stakeholders, are inculcated into every organization to align the company's business goals with any new initiatives they partake in and ensure that the company's work and messaging remains as it should. All three groups contribute to the overall success of the company in different forms. For instance, investors need a business where they can put their resources and earn a return on their capital. Investors provide the money that is needed for a company to operate, which is pivotal to the establishment of a real estate investment fund. Customers need to buy goods and services, and employees need to find income and personal satisfaction, thus working for an organization. Mr. Steinberg's perspective is one must identify who their stakeholders are and how each group individually contributes to the overall success of the company. Speaking specifically to his asset portfolio, he needs investor money to raise capital to purchase homes. The company also needs employees to carry out sales and leasing, customers, who are our tenants, to pay the rent in order to ensure our mortgage payments and operating costs are covered, as well as suppliers and vendors to fix any issues reported in the home for repairs. One group does not provide more value than the other, as firms need stakeholders, and stakeholders also need firms equally.

A value chain is the layout of activities a company uses to execute its business strategy. Companies evaluate their value chain to clearly map out the activities that strongly bestows value for their customers, together with the costs needed to execute such activities. In my interview with Mr. Steinberg, I asked what an example of a value chain within his real estate company with his tenants is. His perspective is that a real estate company must have a harmonious value contribution to the organization's business economics that occupy and utilize that particular real estate if it is to instruct enough support necessary to bring up the required rental revenue to justify its development or purchase. The expense of the tenant is the revenue of the property owner. The value of the tenant's rent has to be matched by the rental services, properties, and promotion represented by the real estate. If a company fails to break even the value of rent, it cannot expect to remain in business, funds for investment in such operating economics cannot be provided, and thus, the business cannot continue, leave alone grow. Therefore, what a tenant pays for a particular real estate in value must be lower than what he or she utilizes in that real estate.

Conclusion

Overall strategic planning, analyzing who your stakeholders are and who contributes to your value chain are all important aspects a strategic leader must evaluate periodically to ensure the overall success of a company's business goals.

References

Foley, Andrew. How to Select the Right Strategic Measures. ClearPoint strategy. Retrieved on June 16, 2020, from https://www.clearpointstrategy.com/how-to-select-strategic-measures/